Anglo American to sell Drayton mine

Selling: Anglo American is selling its Drayton mine after the multinational announced it was getting out of global coal.ANGLO American is selling its Drayton and Drayton South mines as part of a global withdrawal from coal only weeks after denying it would sell Drayton to avoid $275 million in rehabilitation and closure costs.

The multinational announced global coal was “non core” in a statement on Tuesday in which it said it would concentrate on “competitive, long life assets” including gold, platinum and copper.

“Alongside the conditional sale of Dartbrook to Australia Pacific Coal announced in December 2015, Drayton and Drayton South will be assessed for sale,“ Anglo American Coal chief executive Seamus French said.

The company’sMoranbah North, Grosvenor and Moranbah South assets in the Bowen Basin in Queensland will be sold as a package and other Australian coal assets are being assessed for “options for exit”, Mr French said.

The company’s announcement that it was selling its global coal assets came only weeks after renewed concerns it planned to walk from an estimated $275 million in rehabilitation and closure costs at Drayton following rejection of its plans to mine at Drayton South.

In a statement to the Newcastle Herald in January Anglo said it would “uphold its environmental commitments and adhere to the rehabilitation requirements” of its mine closure plan for Drayton, which will leave four mining voids.

The comments came after the Department of Planning in November approved an “unprecedented” Anglo plan for highwalls in the final voids.

Anglo’s decision comes only months after leading energy analyst Tim Buckley warned a NSW Planning Assessment Commission that Anglo would sell Drayton mine “at any price” if Drayton South was not approved.

In a submission as part of the Drayton south consideration process MrBuckley argued that deferring rehabilitation costs was likely a ‘‘key driver’’ behind Anglo American’s third attempt to gain approval for the controversial project, after two previous Planning Assessment Commission refusals.

Anglo rejected the argument.

In a statement on February 2 as it announced an expedited redundancy program for 500 Drayton mine workers, Anglo continued to criticise the Planning Assessment Commission refusal of the Drayton South mine.

“Drayton South would have secured employment for 500 Hunter Valley families as an extension to the existing Drayton operation, which has mined high quality thermal export coal since 1983, for another 15 years,” a spokesperson said.

“Instead, operations will now wind down during 2016 and ultimately will ceased by 2017 with further redundancies to occur progressively during the year.

“Anglo American is reviewing the PAC’s report and will respond in due course in line with the planning process, however the recommendation by the first PAC and the resultant time delays has made a transition of the workforce to Drayton South impossible. As mining activities cease at Drayton, Anglo American will focus on rehabilitation commitments as part of the mine closure plan.”

In its statement on Tuesday Anglodescribed the Drayton South refusal as “devastating”.

It would continue to supportemployees and the company’s “focus remains on safety as our number one priority”, the company said.

“We expect the divestment processes to take time and will ensure we do so responsibly and respectfully and keep all relevant stakeholders informed as it progresses,” Mr French said.